Tenant Fees Bill

Bob Blackman Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 5th September 2018 Commons Chamber

[John Stevenson (Carlisle) (Con)]

Will the Minister give way?

[Bob Blackman (Harrow East) (Con)]

Will the Minister give way?

[Rishi Sunak]

I am happy to give way to my constituency neighbour.

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[Rishi Sunak]

That is the crux of what we will come on to later. The Government’s approach has been not narrowly to specify the specific things that could qualify as default fees. There has indeed been discussion of this topic. The Government’s point of view, which I will explain later, will I hope provide some clarity on that point.

If I may return to the—

[Bob Blackman]

Will the Minister give way?

[Rishi Sunak]

Ah—I give way to my hon. Friend.

[Bob Blackman]

A lot of the Government proposals are formed around what is reasonable, and one of the key tests in law relates to what is reasonable. I gently ask him to set out for the House what he considers to be reasonable. To give an example, he has mentioned the loss of keys. The loss of a normal household door key may be relatively cheap, but security keys provided by only one manufacturer can be very expensive. Is it reasonable for a tenant to be charged should he or she lose such a key? If so, that would mean a default charge of quite a considerable sum of money, even if it was specified in the original contract—the lease or rental agreement. Would that need to be specified in that way, or would it be classified as a reasonable default charge if the key was lost?

[Rishi Sunak]

I again thank my hon. Friend for all his work on the Select Committee in helping us to improve this legislation. I know that he has given great thought to the matters we are discussing today, and we have just heard another example. I can tell him that the word “reasonable” has been chosen very deliberately, because it is a commonly accepted legal term that is widely used in various pieces of legislation and is open to interpretation in a consistent way by the courts. Indeed, the Opposition have chosen the same term in amendment 3.

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[Rishi Sunak]

My right hon. Friend is right. He made the same points in Committee, and I appreciate his raising them again today.

The Government have listened to concerns that some agents and landlords see the £5,000 initial fines as a cost of business and thus repeatedly refuse to comply. That is why the legislation makes landlords and agents liable for a financial penalty for each individual breach of the ban that they commit. In addition, setting financial penalty at up to £30,000 for a second or further breach of the ban will act as a serious deterrent for prolific offenders. It is worth pointing out that further breaches will leave the landlord or agent liable to prosecution and an unlimited fine and, indeed, qualify as a banning-order offence. The Government believe that, taken together, this set of sanctions forms a serious deterrent to poor behaviour. To accept the Opposition amendment would be disproportionate and excessive in respect of the cases we are discussing.

[Bob Blackman]

There is a specific issue in relation to very corrupt landlords who exploit vulnerable people. The concern that I think many Members who have investigated the background to this issue will have had, particularly in parts of London, is that a fine of merely £5,000 will be seen as just the cost of doing business. These people are exploiting vulnerable people to the tune of hundreds of thousands of pounds, so for them even a fine of £30,000 would be nothing. I therefore urge my hon. Friend to consider this matter further as the Bill makes its way through the other place. Will he look at what can be done to take on these people? They are not landlords, but rogues and crooks. They need to be brought to account for the damage they are doing to the rental market and for the exploitation of very vulnerable people who have no choice in where they live.

[Rishi Sunak]

I thank my hon. Friend for that powerful intervention. He knows first hand, from the excellent work he does with his constituents to tackle this issue, the scale of the problem in particular cases. He will be reassured to know that, while existing legislation allows local authorities to levy a £30,000 fine for a second breach, if they choose not to do so, they can go down the prosecution route. For the cases he mentions, that would probably be more appropriate. The sanctions in that case are an unlimited fine and a banning order, which, for the specific landlords he mentions, would be appropriate. I think that he would agree that being banned from being able to rent any property for 12 months or longer, or an unlimited fine, would serve as a very significant sanction to the core behaviour in such cases. With that final assurance, I commend the Government’s amendments.

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[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I am pleased that the Government have finally accepted the need to ban tenant fees, for which my party has called for for no fewer than five years—I have personally campaigned for the ban for four years. I support the Labour Front-Bench amendments, because the Bill does not go far enough. We need further specification of the fee regime to make it more user-friendly, and we need to increase penalties for those landlords and letting agencies that flout the new legislation.

Few places in the country are in more need of this legislation than Oxford. Only 39% of people in the city own their own home or have shared ownership—that is well below the national average. Nearly half—49%—rent privately, and that figure has risen by more than a fifth since 2001. Private renting is not just a stopgap in the city; it is the only option for huge numbers of people.

The cost of setting up and maintaining a tenancy in the private rented sector is a huge problem in the city. The sharpest end of that is seen with the exponential growth in rough sleeping in Oxford. On some nights in the 2000s, nobody would be recorded as sleeping on the street, but nowadays having 60 people rough sleeping is the new normal. That is relevant to this debate because the core reason why people in Oxford become homeless has changed. It used to be relationship or family breakdown, but that is no longer the case. The key reason for homelessness now is landlords ceasing tenancies, often because of non-payment of fees.

There are many excellent landlords and letting agents in Oxford, and I find some of the mischaracterisations of the Opposition’s approach in this area bizarre. We all know excellent landlords and letting agents in our constituencies, but a small number bring the rest of the sector down and pollute its reputation, because they do not act in a responsible manner. A significant proportion of my postbag is taken up with tenants who have been asked for unreasonable fees, as well as people who are simply unable even to rent. In fact, I have a meeting in a couple of days with someone who is trying to move into Oxford but cannot afford the different costs associated with getting into a tenancy, and that is even with the private rented sector deposit guarantee scheme operated by the local authority. People are not able to move into Oxford’s private rented sector anymore.

Labour’s amendments would ensure that the new regime that the Bill will rightly introduce would be sufficiently watertight. I welcome some of the changes that the Minister specified, but we need the fee regime to be upfront in the manner specified by my hon. Friend the Member for Great Grimsby. We need a user-friendly regime that tenants can easily understand, and that is not presently the case under the Bill.

We also need to make sure that the fees are sufficient. Oxford has one of the strictest regulatory regimes for landlords, operated by the local authority. Many landlords support it because they see that it squeezes out the rogue operators, and that it has removed many of the most unsafe and unhealthy properties from the housing market in Oxford. The regime pays for itself, and it is important that the regime under the Bill pays for itself, too. That means that those fees have to be sufficient. We have already had a lot of discussion about the cuts that have been made to trading standards, but it might also be helpful to look at how those fees—the Minister asserted that they would be sufficiently deterrent—compare with some of the profits obtained by landlords in areas such as my own.

The average property rent in Oxford is currently £1,919 per calendar month, so £5,000 is very obviously less than three months’ rent—we can all do the maths. Now, I appreciate that not all that rent will be profit, because of course there are associated costs. However, estate agents encouraging people to come into the buy-to-let market in my city inform those people that they will have an average annual return on their investment of 18%. When we talk about whether a fee is deterrent and whether a £5,000 fine is sufficient, we should reflect on that figure.

Comments have been made about the role of central Government and local authorities. Yes, it is absolutely right, as the hon. Member for Christchurch (Sir Christopher Chope) said, that there are local authorities that do not fulfil their responsibilities. There are others that want to go further but have been able to do so only at the behest of central Government. Please can we get to a situation in which local authorities that want to have more stringent regimes do not have to wait to get the okay from central Government? We need more local control.

[Bob Blackman]

It is a pleasure to follow the hon. Member for Oxford East (Anneliese Dodds) and the passionate view of her constituents. May I draw the attention of the House to my entry in the Register of Members’ Financial Interests?

In the absence of the Chair of the Housing, Communities and Local Government Committee, I had the honour of chairing the Select Committee pre-inquiry into this legislation. We looked at a lot of the evidence that is now coming forward. I am delighted that the Minister has seen fit to make some changes during the passage of the Bill and to accept many of the Select Committee’s recommendations.

The hon. Member for Great Grimsby (Melanie Onn) raised the matter of how many weeks’ rent a deposit should be. It is a shame that she has not tabled an amendment to that issue on Report, because I think several Conservative Members would feel very sympathetic towards restoring what the Select Committee recommended, which was a compromise. There was an argument for four weeks and an argument for six weeks, and we took the view that five weeks was the appropriate compromise for two reasons. First, if the limit is four weeks’ rent, there is a risk that the tenant will just refuse to pay the last month’s rent at the end of a tenancy. Secondly, a deposit of six weeks’ rent would almost certainly become the norm for most landlords, and would therefore be inflationary on the amount of deposit that would be charged.

I gently remind the Minister that in the last Budget the Chancellor allocated some £20 million towards a national rental deposit scheme, following representations from me and several other colleagues to set one up. The Department has not yet set up that scheme, but by saying that the limit will now be six weeks, instead of four or five, the Minister is going to reduce straightaway the number of families that can be assisted under the national rental deposit scheme when the Department finally does bring it forward. I ask him to look at this figure again, because it will limit the number of people who could be assisted through this programme.

On the issue of enforcement, I welcome the changes proposed by the Minister. Many of the changes, which are very clear, go above and beyond those proposed by the Opposition. Having looked at the evidence in relation to this legislation, many of us will share concerns about the difference between what I would classify as true costs, and charges. In answer to my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), the key question is, who does the letting agent work for? The letting agent works for the landlord, not the tenant. It is the responsibility of the letting agent to acquire tenants on behalf of their employer—namely, the landlord—and therefore there should not be two charges incurred. The letting agent should charge the landlord for their fees, not charge the tenant for acquiring.

However, there are costs associated with acquiring a tenant—for example, when there is a requirement for a credit check. If a prospective tenant were to fail that test, there is a cost that someone has to collect. If an applicant makes a request through a letting agent and a credit check is then undertaken that is failed by the prospective tenant, it is reasonable that the cost should be passed on to that individual, particularly if they were going to knowingly fail the credit check in the first place. That is an example of a true cost as opposed to a fee charge. My hon. Friend has set out a set of areas and then a limit on the charges that a letting agent may charge a tenant. I trust that he will not press his amendment to a vote, because that goes completely against the spirit of this Bill and what we are proposing.

[Kevin Hollinrake]

My hon. Friend is making an important point on referencing. Does he agree that it might be beneficial if the Bill were clarified so that everybody was clear about circumstances in which some of the holding deposit might be retained by the landlord or the agent in the case of somebody failing a reference check? If that were not the case, people on low incomes, for example, could be discriminated against when they apply to rent a property.

[Bob Blackman]

I thank my hon. Friend for that intervention. We clearly need to be more specific. I accept the principle set out by my hon. Friend the Minister that we should not put this in the Bill, but it should be put in regulations, because we can change regulations rather more easily and add things to them at an appropriate time without having to go through primary legislation once again. This is a question of detail that I ask my hon. Friend the Minister to look at again.

The other issue is charges for, for example, lost keys, cleaning or damage that may be done to a property. Those are reasonable costs that a tenant should incur. If that has to be set out in the tenancy agreement, it must be made crystal clear in what we lay out in regulations and guidance to landlords what is allowed and what is not allowed. In particular, things that are not allowed must be specified as being completely outwith the potential of the Bill, as opposed to being in the Bill.

I thank the Minister and his team for looking at and reflecting many of the recommendations that the Select Committee made on the draft Bill. With a few more tweaks, this can be an excellent Bill that we can all be very proud of.

[Bim Afolami (Hitchin and Harpenden) (Con)]

I rise in support of this Bill and my hon. Friend the Minister. During the Bill’s passage, he has conducted himself, as I think everybody in all parts of this House has already recognised, with the utmost sincerity and courtesy to all parties, both inside and outside the House.

I served on the Bill Committee—entirely voluntarily, of course, Madam Deputy Speaker. Having listened to the exchanges in Committee and today, it strikes me that there are a couple of points where there is complete agreement in all parts of the House. There is agreement that the average letting agent fees have gone up by 60% over the past six or seven years, and that there is a growing problem of tenants feeling that they are less empowered in relation to their tenancies and letting in the private sector market.

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[Dr Allin-Khan]

Will the hon. Gentleman give way?

[Bob Blackman]

Will my hon. Friend give way?

[Sir Christopher Chope]

No, I will not give way, because I want to allow hon. Members who have not yet spoken to get in.

Why are we preventing letting agents from charging for credit reference searches, identity and passport checks, and all the rest? When one looks at the evidence in support of the Bill, it is quite clear that if the existing laws were properly enforced, the need for the Bill would not have arisen. I am extremely sceptical about the Government’s assertion that enforcement will be a lot more effective. If they really believe that, why do they not place a duty on local authorities to enforce the legislation, rather than leaving it as a mere power?

The legislation will have a lot of unintended consequences. It is already difficult enough for tenants to obtain rented accommodation if they have pets. It is very difficult for tenants on housing benefit to obtain accommodation. It is very difficult for tenants who do not have clear British citizenship to get rented accommodation. All those things will become a lot more difficult as a result of this additional burden on the private rented sector.

Some 30 years ago, I was a junior Housing Minister. I was much associated with deregulating the sector—introducing shortholds, getting rid of controlled tenancies and enabling the growth that has taken place in the private rented sector. I am disappointed to see my Government working in the opposite direction. I signed amendment 4, which was tabled by my hon. Friend the Member for Shrewsbury and Atcham. I understand that he has been bought off by the Government, so I will not press the matter to a vote. However, I think that there is too much crowd-pleasing on the part of the Government and not enough sensible regulation and recognition of the important work done by those in the private rented sector.

Oral Answers to Questions

Bob Blackman Excerpts

Monday 23rd July 2018 Commons Chamber

[Nigel Adams]

We are committing an enormous amount of money—£1.2 billion over the spending period—and we expect local authorities to follow the example of councils such as Barnet, which has managed to achieve that reduction. I encourage the hon. Gentleman to talk to his local authority and perhaps to approach Barnet to see an example of best practice.

[Bob Blackman (Harrow East) (Con)]

Local authorities are ignoring circulars from the Department and housing children in temporary accommodation many miles from their place of education. What can my hon. Friend do to enforce circulars and make councils take into account educational requirements when housing children and their families?

[Nigel Adams]

My hon. Friend makes a superb point. I can be absolutely clear from the Dispatch Box that local authorities must take account of circulars. It does seem nonsensical that councils are taking this approach. Youngsters are being taken away from their local areas and their schooling is being affected.

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[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I thank the hon. Lady for highlighting those particular cases, the details of which I am not intimately familiar with. I would be happy to look into the matter. She is absolutely right to highlight the important role that local authorities play in prevention, particularly when it comes to public health. As we approach the spending review and the fair funding review, I would be delighted to talk to her to see how we can best capture the role that local authorities play in delivering that.

[Bob Blackman (Harrow East) (Con)]

T3. It is extremely good news that the Government have allocated a record amount of funding for new housing in London. Could my right hon. Friend then explain to the House why it is that new housing starts are going up in England but, in London, they are going down?

[James Brokenshire]

The Government are clear that the Mayor can and should do more to increase housing delivery and it is vital that the new London plan provides the strategic framework to achieve that. The Mayor must show strong and proactive leadership and take responsibility for creating the right conditions for development, but it is also about Labour councils in London. It is notable that, in Haringey, it appears that the council has put left-wing ideology in the way of 6,400 more homes. It is really concerning that Labour appears to be putting politics ahead of people.

Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill

Bob Blackman Excerpts

Committee Debate: House of Commons
Wednesday 20th June 2018 Public Bill Committees

[Ms Buck]

Since Second Reading, I am very pleased to say that, with the co-operation of the Minister and the help of officials, we have been able to bring forward a planned amendment to extend the provisions of the Bill to common parts, which I will briefly explain.

Where a dwelling is part of a larger building—a room, for example, in a home in multiple occupation, a flat in a purpose-built block or a house that has been converted into flats—amendment 4 would extend the implied covenant of fitness, so that the whole dwelling would be fit for habitation, including any part of the building in which the landlord has an estate or an interest. That would include, for example, the outside walls and roof of a block of flats, and the internal common parts where the landlord owns the block.

If the common parts are in such a state that they present a risk to the health or wellbeing of the occupiers of the dwelling, the landlord will be required to take remedial action, subject to any exceptions available under, for example, the main amendments that we have made to clause 1. Amendment 4 is necessary to give effect to the purpose of the Bill, because without it the implied covenant would be restricted to the extent only of the demised property—that is, the flats—and would not catch, for example, fire safety hazards in the common parts.

Amendment 3 would ensure that where a landlord requires the consent of a third party—such as a neighbour, a superior landlord, a mortgage company or a public authority, such as one responsible for giving listed building consent—to carry out the works required to remedy unfitness, the landlord would not be liable if they had made reasonable efforts to obtain that consent but it had not been given.

[Bob Blackman (Harrow East) (Con)]

This is an excellent Bill, which I think we all support strongly. One issue that has raised concerns is the definition of “fitness” and who decides whether a building is fit or not. Is it the individual who has the lease or is it the landlord? Who makes that decision? Is there agreement on that matter with the Government and the Minister?

[Ms Buck]

That matter has indeed been agreed with the Government and is included in the Bill. The Bill amends the fitness standards of the Landlord and Tenant Act 1985 and updates them to incorporate part of the Housing Act 2004, which is basically the housing health and safety rating system. It will therefore be a more comprehensive and updated list.

In some cases, the tenant would still require an assessment to be carried out by the local authority before taking legal action under the Bill. In that sense, this legislation is complementary to the work that local authorities already carry out. In some cases, the tenant will make private arrangements for that, and in some cases the unfitness will be so evident that the tenant will be able to take action themselves by gathering photographic and other evidence that will clearly imply that the property is unfit.

In incorporating the updated fitness standards, we have made sure that we have future-proofed them, because I am conscious that there is a debate about the housing health and safety rating system and the risk-based approach. I am sure that there will be an opportunity to look at that again and consider how it can best be revised. We want to ensure that the Bill can incorporate any changes of that nature in the future.

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[John Healey]

We are debating clause 2 stand part. Clause 2(2), which I am glad to see survived the joint work with the Department, states:

“This Act comes into force at the end of the period of three months beginning with the day on which it is passed.”

The Minister and her team will be not only working on the content of the Bill, but planning and anticipating its implementation. When does she expect Royal Assent, and therefore the Act to come into force?

[Bob Blackman]

I echo the appreciation and thanks expressed to the hon. Member for Westminster North for introducing the Bill. She tabled an amendment to my private Member’s Bill that helped vulnerable people being offered accommodation by local authorities, to ensure that their homes were fit for habitation. That was a complementary move, and I strongly support today’s Bill.

I have a few questions for the Minister, which I will ask now rather than intervening when she rises to speak. My first question complements what the hon. Member for Plymouth, Sutton and Devonport said. One concern is that tenants who complain of the poor standard of the accommodation in which they live may be subject to retaliatory evictions. Clearly the Government must take action on that, or the teeth of the Bill will be irrelevant. Will the Minister ensure that the Government consider how to prevent retaliatory evictions? Will she also look at the issue of the guidance that the Department gives local authorities on enforcement? That is another key aspect of the Bill.

Thirdly, will the Minister look at the concerns that have been raised by a number of tenants’ groups and representatives of organisations that are looking at the degree of tolerance of homes that are unfit? I raised with the hon. Member for Westminster North the concern of who defines fitness. It is clear when a place is terribly bad, but electrical dangers can be unseen and the tenant may not have the knowledge to be aware of them. How is that to be determined? It is part and parcel of what we want to do to ensure that tenants are safe and clear.

While I am on my feet, I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests.

[Clive Efford (Eltham) (Lab)]

I do not want to detain the Committee for long, but I add my congratulations to my hon. Friend the Member for Westminster North. We have been in the House together for 21 years and she has never failed to battle on behalf of tenants, including and people vulnerable to being exploited by ruthless landlords. I want to put on record my respect for her dogged determination over so many years. In doing so, I echo the comments of other hon. Members on enforcement and the need to ensure that what is in the Bill is followed through.

Retaliatory evictions by ruthless landlords have been mentioned. That happened to a constituent of mine, which resulted in her being deemed by the local authority to have made herself intentionally homeless. That was a double whammy for that person. The local authority does not have the resources to investigate in depth to get to the bottom of why someone has been evicted.

If the words on the Bill’s pages are to have any meaning for some of the most vulnerable of our constituents, following through and making the resources available to enforce them is essential. I conclude by again congratulating my hon. Friend.

Non-Domestic Rating (Nursery Grounds) Bill

Bob Blackman Excerpts

2nd reading: House of Commons
Tuesday 5th June 2018 Commons Chamber

[Rishi Sunak]

My hon. Friend is, as ever, an incredible champion for agriculture and the rural community. She is right to highlight not only the current contribution of the fantastic horticultural sector to the UK economy in providing such fantastic food and drink for us to enjoy but the opportunities that will come after Brexit, as we make good on the promise of a global Britain where our food and drink exporters can look out to the world around, where demand is growing exponentially, and take advantage of all those opportunities. Consumers around the world will have the opportunity to benefit from high-quality produce developed in this country and always to high welfare standards, of which I know she is also a champion.

It is worth noting that the exemption from business rates for agricultural land has been in place since 1929. Before that, in the early part of the 20th century and before, agriculture benefited from a partial exemption from rates. For almost 100 years, the Government and Parliament have considered that agriculture should not pay rates. This Government and I trust that this Parliament has no intention for any change of direction in this matter.

It has been assumed until now that all plant nurseries where plants or trees are grown in the initial stages of their life, as I outlined, benefited from that exemption. That had always been the understanding of both rating valuers and practitioners, but in 2015, a Court of Appeal decision showed that the exemption did not apply to plant nurseries in buildings where the buildings were not used in connection directly with agricultural land. That does not reflect Government policy, and neither does it reflect our commitment to supporting sustainable growth in the rural economy.

This legislation will ensure that plant nurseries in buildings will once again benefit from the exemption from business rates for agricultural land and buildings. It will restore fairness for hard-working businesses hit by an unexpected tax burden, and it will enable the Valuation Office Agency to return to its former practice of exempting plant nurseries in buildings and removing plant nurseries that have been assessed from the business rates list. Plant nurseries paying business rates since 2015 will be eligible to apply for a backdated refund of their business rates, which will ensure that these businesses do not continue to suffer as a result of a property tax with an impact on the cost of farming and produce.

[Bob Blackman (Harrow East) (Con)]

My hon. Friend is clearly laying out the Government’s position, but can he clarify one issue that has been raised with me? Garden centres are commercial centres for direct provision to the public, but what will be the position under the new legislation of hybrids—in other words, plant nurseries with a garden centre alongside them that sells their produce directly to the public?

[Rishi Sunak]

I thank my hon. Friend for bringing up a helpful and important point that is worth clarifying. Under current legislation, garden centres are not exempt from paying business rates because they are not treated as agricultural businesses, which I am sure hon. Members will understand. It would be for the Valuation Office Agency to determine the individual facts of the case that he mentioned, but in general, it is perfectly possible for different parts of an entity to be treated in different ways. In the example he gave of a hybrid, where an agricultural business also had a retail operation, the Valuation Office Agency would be able to treat different parts of the business in different ways, and some may benefit from the agricultural exemption. Another example might be a working farm that also happens to have a retail element—for example, a farm shop—that might not benefit from the agricultural exemption, whereas the rest of the farm would. I hope that that clarifies my hon. Friend’s query.

In developing this legislation, we have worked very closely with the National Farmers Union to make sure that the measure meets our shared aim of ensuring that plant nurseries benefit from the agricultural exemption. I want to put on the record my thanks to the NFU for its invaluable insights and expertise, which has helped us to bring this effective legislation to the House. I very much welcome its support for the Bill.

I also want to put on the record my thanks to my hon. Friend the Member for St Austell and Newquay (Steve Double). He deserves enormous credit for highlighting this issue to both my predecessor and others last year, and he has continued to press the case with Ministers and other parts of the Government. I am glad that he will be able to see the fruits of his labour brought to bear today.

To return to the comment made by my hon. Friend the Member for Harrow East (Bob Blackman), the Bill will not otherwise disturb the existing boundary of the agricultural exemption, so uses beyond agricultural operations, such as garden centres, will continue to be subject to the normal business rates process.

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[Rishi Sunak]

The businesses will not be able to claim costs; the new “check, challenge, appeal” system allows them to make a no-cost filing with the Valuation Office Agency, so there will be no cost to them as they claim back the bills they paid. However, it is important to note that, when they paid, the bills were not paid in error; they reflected the circumstances on the ground at the time.

I said that I would clarify why the date in Wales is different from the date in England. It is purely on the advice of Welsh Government officials. They do not believe that any businesses have been caught up by this in a way that would impact their previous list. In Wales, therefore, any active businesses caught up in this will only have their bills backdated to 2017 at the start of the new and current ratings list. Further retrospective dating is therefore not required.

[Bob Blackman]

My hon. Friend is clearly setting out to answer many of the questions from across the House. Will he clarify the number of businesses caught up in this and the total amount of money involved? I quite understand if he is unable to answer those questions today, but it would be helpful to many colleagues if this could be clarified subsequently in writing.

[Rishi Sunak]

I can answer my hon. Friend’s question now. The Government do not actually know, and are not in a position to know, the tax or business rates circumstances of individual businesses across the country. The VOA is under no obligation to share confidential taxpayer information with the Department. What I can say, based on informal conversations with the sector and the VOA, is that we believe just a handful of businesses impacted by the court ruling have subsequently had their bills changed. That is the working number we are aware of and I hope that provides the clarity he requires.

To return to digital taxation, the paper published at the 2017 autumn Budget sets clear expectations on what the Government hope to achieve on digital taxation: international momentum behind long-term corporate tax reforms and, pending that, the development of interim multilateral digital tax measures.

In conclusion, the Bill delivers on our commitment to support the rural economy and promote this country’s rural life. Moreover, it promotes fairness for hardworking businesses in the agricultural sector. I believe that it has widespread support from the agricultural community and valuers around the country. I very much commend it to the House.

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[Rebecca Pow]

That is a good point. Industries such as horticulture are not quick—it takes time to grow plants and for them to go through the cycles, so it is important that businesses have the security and confidence that this Bill will put back into their lives. I am grateful for that.

The HTA has reported that some members are facing bills to the tune of hundreds of thousands of pounds, which we do not want. I am pleased the Bill clarifies the situation and is aligned with the previous practice of exemptions. I am particularly pleased to hear that the funds will be backdated, as the Minister clearly said.

I thank the Minister, because many colleagues on both sides of the House have been to see him, and he has listened. That is what people want from the Government, and we are making the change. This is the right way to go. The turnaround supports the Government’s commitment to a vision of a productive, competitive and sustainable UK agricultural sector, of which horticulture and the plant nursery sector are an important part.

Plant nurseries are under the microscope in the Bill, and they are important to our landscaping industry and to our towns that have been landscaped. Taunton has just received garden town status and will be seeing more landscaping. We want more trees and, as the MP, I have laid claim to that and have said that we must have more trees in our urban environment. Local authorities are not necessarily keen on having more trees, because they claim trees have a high maintenance cost, but we will change their mind.

Plant nurseries are hard-working businesses with soil under their fingernails. They grow plants from seed to germination to propagation, and many nurseries then sell them on to the next stage for businesses to grow them before they ultimately get into the market. That is what the Bill is about—plant nurseries are important stepping stones.

Nurseries will become increasingly important, because we need to increase our home-grown production, if nothing else, to prevent the threat of pests and plant diseases coming in from abroad. There is a terrible disease called xylella that is wiping out olive trees and many other herbaceous and woody commercial plants in Europe. We do not want that in the UK. If we grow more plants at home, and if we help our businesses with business rates exemptions such as this, we can expand and grow our own industry. That is essential, because there is a great line of diseases waiting to march in here on imported plants. We have a very good biosecurity system, but there is always a danger of disease. The more we can help our businesses to grow with Bills such as this, the fewer diseases we will have in this country.

The Bill will help an industry with very tight margins. It is a crucial step, and I know the Minister is taking it all to heart because he is committed to enabling the viability of the agricultural industry, rather than saddling it with a property tax. The Bill is about supporting the economy, and it is vital for the south-west, where horticulture is so important. Horticulture needs to grow, and I hope the Bill and the plant nurseries it supports will blossom.

[Bob Blackman]

rose—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Bob Blackman, you have one minute before the Front-Bench speeches.

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to follow my hon. Friend the Member for Taunton Deane (Rebecca Pow). We have discovered that she is clearly a star of stage, screen and media.

I pay tribute to my hon. Friend the Member for St Austell and Newquay (Steve Double) for raising this issue in the first place. Equally, I pay tribute to my hon. Friend the Member for Nuneaton (Mr Jones) who made the commitment on behalf of the Government, and I thank the Government for delivering on that commitment.

The devil is in the detail. In my constituency, on the edge of the green belt in London, we have plant nurseries that are growing plants, as well as garden centres that are selling them. One of the institutions in my constituency that has had a problem has been held back: young people with learning disabilities are planting plants and growing them for commercial sale, but the investment in that has been held back because of the very decision we are discussing. So I trust that when we clarify this, it will be clear.

The final thing I want to say is that the devil is in the detail and we need to clarify the provision in respect of plant nurseries and garden centres. We should not run the risk that certain people may choose to ride roughshod over the intentions of the House by turning garden centres into plant nurseries and trying to avoid paying business rates as a result. With that, I strongly support the Bill.

Tower Block Cladding

Bob Blackman Excerpts

Monday 21st May 2018 Commons Chamber

[James Brokenshire]

There are legal restrictions on me in terms of my obligations under the Building Acts to consult on changes to building systems and regulation. However, I underline that, as Dame Judith points out, the safest approach is to use non-combustible materials, and that is the very clear advice.

[Bob Blackman (Harrow East) (Con)]

The Select Committee had an opportunity to review Dame Judith Hackitt’s report and to question her on it. One of the clear issues is legislative change, as my right hon. Friend has mentioned. Will he set out whether that is primary or secondary legislation, and what the timeframe is for the process we will have to go through, because decisions need to be made?

[James Brokenshire]

The end-to-end approach that Dame Judith recommends in her report will require primary legislation and secondary legislation. That is why I have said I will come back to the House before the summer recess to advise on the next steps, with a comprehensive response in the autumn. I made a commitment to primary legislation on Thursday, and I believe that is what is required, but it is a question of getting it right.

Tenant Fees Bill

Bob Blackman Excerpts

2nd reading: House of Commons
Monday 21st May 2018 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to follow the Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts). For part of his absence, I had to chair the Committee as we carried out some of the pre-legislative scrutiny of the Bill and agreed the final report that the Committee published. I am pleased that the Government have seen fit to adopt many of our recommendations, which were agreed on a unanimous all-party basis. This is one of the areas that the Government should learn from, across the Departments. Submitting draft Bills to Select Committees and asking them to carry out pre-legislative scrutiny improves the legislation before it comes before the House, and many other Departments could learn from this and use the same method to improve their legislation. I should also like to draw the House’s attention to my entry in the Register of Members’ Financial Interests, in that I am a vice-president of the Local Government Association and I have a small portfolio of properties that are rented out.

A key area is the need to strike a balance between landlords and tenants and the agents that they utilise between them. I agree with other Members that it cannot be right for an agent to work for both the landlord and the tenant, and for fees to be charged in both directions. The principle has to be that the letting agent acts on behalf of the landlord and that the landlord therefore pays the costs of the agent. Tenants should not be charged for the purposes of identifying a tenancy. As we in this country increase our dependency on the private rented sector, this is becoming an ever greater problem and it needs to be addressed.

I warmly welcome the Government’s decision to bring forward this legislation, and I am delighted that they have accepted so many of the Committee’s recommendations. However, I want to deal with some of the recommendations that they did not accept, as they are the ones that form the nub of the debate. First, I should like to be just a bit critical about the process of deciding whether there should be an assessment of impact or an impact assessment. The Committee thought that the Government should have carried out a proper impact assessment on publication of the draft Bill before it came to us for pre-legislative scrutiny. They chose not to do that, and instead decided to carry out an assessment of impact and subsequently do an impact assessment. I will not go into all the technicalities involved, but this was one of our key concerns.

We also considered in some detail the question of whether a deposit should be based on four, five or six weeks’ rent. Clearly, landlords would like as large a deposit as possible and tenants would like to pay as little as possible. Our concern over limiting the deposit to four weeks’ rent was that most tenancies involve paying rent monthly and that at the end of a tenancy, the tenant might simply skip without paying the last month’s rent. At that point, the landlord would have to enforce and retain the deposit. Similarly, we felt that six weeks would be too long, and that it would be a barrier to many tenants seeking to rent. We therefore struck a balance and recommended five weeks, on the basis that both parties would have something to lose if the deposit had to be relied upon. That is why we arrived at that compromise arrangement, and I am disappointed that the Government did not accept our strong arguments in favour of that compromise. I believe that once a maximum figure is set, it is almost inevitable that all landlords and letting agents will go straight to that maximum level. That has a severe impact and would be an unfair charge for people on relatively low incomes.

The Government have partly accepted the Select Committee’s position on whether fees such as holding deposits can be considered reasonable. If someone goes into a letting agency wanting a tenancy, appropriate fees for reference checks, which are of the order of £20 to £50, are reasonable costs for them to incur, but it is unreasonable for the landlord to pay if someone fails a reference check. The Committee also recommended that if a prospective tenant gives deliberately misleading information, they should lose the holding deposit, which should be retained by the landlord. That suggestion has not been in accepted in full by the Government, and it needs to be considered in detail again.

Another of the Committee’s concerns was that if the first month’s rent is artificially high and then the rent decreases over time, that hidden fee is unfair on the tenant. However, we want it recognised that rents can go down as well as up. The Bill essentially presumes that the cost of a tenancy will always increase and that the rent will increase when a tenancy is renewed. However, the market could determine that rents will come down, so there should be a provision that allows for rents to fall, particularly over the course of a longer tenancy.

I completely agree with what the Chair of the Select Committee had to say about retaliatory evictions, and we must review the whole process in law. We cannot necessarily do all that in this legislation, but the position could be corrected through provisions in this Bill. Tenants must feel able to complain to trading standards, the housing court or whatever organisation we choose, without running the risk of being evicted. Such evictions cannot be right, and we must draw a firm line under them.

In conclusion, I agree with the current draft of the Bill, but there are some changes that would improve the legislation for all concerned and strike a much better balance between tenants and landlords.

Local Authority Overview and Scrutiny Committees

Bob Blackman Excerpts

Thursday 17th May 2018 Westminster Hall

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to serve under your chairmanship, Mr Sharma, for what I believe is the first time. It is also a pleasure to follow the Chair of the Select Committee and his presentation of the report. It is a unanimously agreed report that all members signed up to and agree with, and I speak as one who serves on the Committee. I spent 24 years as a local councillor before being elected to this place—no doubt you served many more, Mr Sharma. I know that the Chair of the Select Committee served in local government, as did the hon. Member for Blaydon (Liz Twist)—I think she continues to serve.

[Liz Twist (Blaydon) (Lab)]

No longer.

[Bob Blackman]

The hon. Lady has stepped down.

I came up through the committee system. When I was elected leader of the council, the Deputy Prime Minister at the time offered me the opportunity to pilot the cabinet structure. I said, “I think I have enough on my plate without piloting this cabinet structure, thank you very much, Mr Heseltine.”

The advantages of the committee system have to be remembered. All councillors served on committees and committees were held in public—there was great interest in what they debated. There was a political benefit as well, in that officers produced reports and until the time they voted on a report, whether a councillor was in the political group in charge or in opposition, they could oppose and amend the report and put in new recommendations of a political nature, which divorced the officers from the political side of the decision making, but it also enabled the ruling group to row back from something that was possibly not in the public interest of their area. That was one of the advantages.

The big disadvantage was that the process was very slow and often cumbersome and uncertain. That is why almost every council in the country moved to the cabinet structure as quickly as they could. Its disadvantage is that decisions are made in private; they are not transparent to the public. Although cabinet or executive meetings are held in public, the most important decisions are taken in private before those meetings take place. Up and down the country, very few members of the public bother to attend cabinet or executive meetings, and the press—and councillors, in general—have given up interest. That is a really serious drawback.

Overview and scrutiny is a vital part of our democratic process. I will come to some of the recommendations that I am disappointed the Government did not accept in a minute. I take the view that overview and scrutiny are two separate things. Overview is the development of policy. The ruling group on a council should take ownership of it and really drive it as a means of developing policy for the whole council. Scrutiny is about examining decisions that have been made or are about to be made, and ensuring that they are fit for purpose, that they are the right decisions and that they are justified.

I served for 24 years on Brent London Borough Council, which is very confrontational, and we reached a constitutional settlement whereby the chair of scrutiny had to be from the opposition and elected by full council, exactly as the hon. Member for Sheffield South East (Mr Betts) said. We were the pioneers. The two major parties agreed that that was the right way to go. At every council meeting, the chair of the scrutiny committee reported directly to the council with a written report on their scrutiny work, and there were questions to the chair of the scrutiny committee at full council. At times it was embarrassing for the ruling group, but there was proper scrutiny of the decision-making process.

I also served for four years as chair of the forward plan select committee, which sounds pretty horrendous. We brought together colleagues from across the council to scrutinise the expected work of the executive to ensure that they were delivering on their plan and that the responsible councillors knew what they were talking about. It was similar to the Housing, Communities and Local Government Committee: whenever anyone visits our Select Committee, it is very hard for them to determine which political party its members are from, because we all want to improve the Government’s work and we are not party political. It is a model of good practice.

If scrutiny is not properly resourced, it tends to be an inconvenience. Senior officers say, “It would be a lot better if we could just get on with the job, rather than having to account to councillors.” The chief executives and chief officers of certain local authorities downplay scrutiny because they find it inconvenient; it gets in the way of getting the job done. I have less sympathy for that view, because the reality is that good scrutiny improves decision making, improves services and ensures transparency in the public eye.

I hope that when the Government issue their guidance on public scrutiny they will look at such measures. I am a localist—I believe it is absolutely right that local authorities make their own decisions about their processes —but it is good practice that the chair of scrutiny be elected by full council, and ideally that they be a member of the opposition. It is then up to them how to play it, but I suspect that if the opposition play it sensibly—if they call the executive to account, as opposed to playing party political games—the scrutiny will be very effective. That is a key item.

I also have concerns about private and confidential information that is not disclosed to councillors. I take the view that all information should be available to councillors on reasonable request, unless the legal officers certify that it should not be made available. The presumption should be that all information is available to councillors, not selectively. If there is a contractual or other reason to keep it secret during the decision-making process, that is reasonable, but once the decision has been made all information should be made available so that it can be properly scrutinised. I worry that serious errors—not underhand dealings—are often made by local authorities. There are concerns about how contracts are let and about decision making, and there are conflicts of interest among both councillors and council officers. That needs to be exposed in the glare of publicity, and the best way of doing that is through the scrutiny process. I hope that the Government will look at that in the guidance that will be issued, because it needs to be firmed up considerably. Because some local authorities do not take scrutiny seriously enough, we should publish the amount of money and resource available. It must be scrutinised, and the executive and senior officers must be held to account. That would enable us to see a proper comparison.

There is an opportunity here for a great renaissance in local government scrutiny. The executive or the cabinet makes decisions on behalf of the local authority. There is now a whole series of academy trusts—schools that are outside the control of the local education authority—so why should the local authority not scrutinise their work? I know that Ofsted does that, but why should the local authority not look at what matters for local people? As the hon. Gentleman said, why should the local authority not scrutinise the police in certain cases? In my experience, health authorities fight tooth and nail to prevent information being provided to scrutiny committees. Even though they are required to provide information, they put every blockage they can in place. Then there is the fire service. I could go through every public service that affects a local area. Why should local authority scrutiny not be used to examine the services that are provided to the public?

We could go even further and be even more radical. We could look at the central Government resources that are applied to a local area. Perhaps they could be scrutinised by the local authority—I suspect that there may be some resistance to that idea from the Government. This is an opportunity to expand the role of local authorities and local councillors, who do a brilliant job of reporting issues that concern their constituents. We could empower them even more. By empowering them, we would give them an opportunity to shape the place they live and work in. That would put oxygen into the life of local authorities, and would encourage not only the press but local people to participate in their local authority’s work. At the moment, I am afraid the mood is, “Well, they just get on with it. We vote once every four years, or once every year, to elect local councillors, and unfortunately that doesn’t do the job.”

The Minister is new to his role, and was not responsible for writing the Government response to our noble report, so perhaps he can reconsider some of our recommendations in the light of this debate. That would show that he is not only reading and absorbing our reports, but listening to what we have to say.

--- Later in debate ---

[Rishi Sunak]

I would love to be, but the review is being conducted by my colleague, the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), so I do not have the exact timing to hand. The review was announced through the industrial strategy White Paper. I am sure that we will share as much information as we are able to with the Committee. The hon. Gentleman knows that, alongside that, the assurance framework is in the process of being reviewed and updated. That work is going on with people in the industry, including the Chartered Institute of Public Finance and Accountancy and officials. I will make sure that all that is contained in the letter, with as much transparency on timing as we are able to give.

Another key concern that the Committee raised was that scrutiny seemed to be a second-order matter for combined authorities. I assure hon. Members that I take accountability in these new authorities very seriously. I am confident that the framework we have put in place provides the basis for a robust and consistent approach to scrutiny for combined authorities across the country. In particular, the Combined Authorities (Overview and Scrutiny Committees, Access to Information and Audit Committees) Order 2017 was a key step in implementing devolution deals, and will ensure effective accountability for the new budgets and powers that have been devolved.

Members raised the question of resourcing. The Government announced at the last Budget that they will make available to mayoral combined authorities a £12 million fund for financial years 2018-19 and 2019-20 to boost Mayors’ capacity and resources. Combined authorities are free to use that to ensure that scrutiny and accountability arrangements are effectively resourced and supported.

I turn to the recommendations that the Government are considering. Access to information was raised by all three Back-Bench Members who spoke—my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Members for Blaydon (Liz Twist) and for Sheffield South East. They made a persuasive and compelling case that we should have a hard look at that area. As a new Minister, I tell my hon. Friend that the point about information was the one thing that really stuck with me. In our response to the Select Committee, we committed to looking at that and deciding how best to manage it.

I agree that scrutiny committees should be able to access the information they need to do their jobs effectively. I can see that some executives might seek to deny committees access to that information if they do not appreciate their obligations or understand the value of scrutiny. I want to take soundings from the sector and figure out how best to move forward before committing, but hon. Members’ case that this is something we should consider carefully will stick with me, and I will ensure that I take it away. If we decide that new measures are appropriate, I will of course come back to the Select Committee with those.

My hon. Friend the Member for Harrow East and the hon. Member for Sheffield South East also raised the role of elected chairs. My officials and I will speak to the sector and think about how best we can establish the impact of elected chairs on the effectiveness of scrutiny committees. In general, chairs should be selected on the basis of their skills, experience, integrity and objectivity, not of how amenable they are to the executive. Although the new guidance will remind councils that they already have the option to elect rather than appoint a chair, it is right that every council should decide for itself how to select its members.

Let me say a few words about some of the recommendations about which there is a small difference of opinion, which I hope I can explain. On the point about councils publishing a summary of resources, although the Government require councils to publish certain information for transparency purposes, making available details of the resources allocated to scrutiny would be difficult in practice, for the simple reason that councils often do not have a dedicated scrutiny officer or staff. Instead, they pull in resources as and when they are needed, so it may be difficult for them to produce accurate figures.

[Bob Blackman]

I remember that a former Secretary of State—namely, Sir Eric Pickles—believed absolutely in transparency, such that he insisted that every council must publish every item of expenditure in excess of £500. Given that I do not think that policy has changed, what is the problem with asking councils to publish what should be a considerably higher figure than £500?

[Rishi Sunak]

I agree that transparency is important, and I am glad that my hon. Friend supports the transparency agenda, which the Government continue to lead. Transparency is of course the best disinfectant and the best way for accountability to work in practice. There is a practical difficulty with trying to aggregate lots of small expenditures, which is why there is a £500 threshold in the transparency code. I agree that £50 here, £25 there and another £100 there may add up to a greater figure, but identifying all the individual components may be tricky. However, I agree that transparency is important.

The hon. Member for Blaydon mentioned training. In its report, the Select Committee suggests that the training offered to members and officers does not always meet their needs, and that the Department needs to better manage the funding it provides to the sector. Having looked into the training offer, I remain broadly happy with it. It already includes a specific two-day course for new or aspiring scrutiny chairs, and I am comfortable that, for now, it meets the needs of the sector.

I note that the Local Government Association wrote to the Select Committee to provide further details of the overwhelmingly positive feedback it has received about its training programme. The Committee will be aware that our new memorandum of understanding with the LGA sets out our expectation that it will remain responsive to feedback and ensure that the training it offers remains relevant and effective. However, I agree that training is important, and I hope that the response the Committee gets from the LGA reassures it that what is in place is at least a good foundation.

--- Later in debate ---

[Rishi Sunak]

I will of course write to the hon. Gentleman when we have had conversations with the sector on that point.

[Bob Blackman]

I want to clarify the point about information, which goes absolutely to scrutiny. I made the point that the presumption should be that information should be available. Rather than the current position, in which officers grudgingly give information to scrutiny committees and suchlike, it should be for the legal officer to say why information should not be available. Will my hon. Friend look at that specific point in detail and come back to the Select Committee?

[Rishi Sunak]

Hopefully I can reassure my hon. Friend. The main point that I have taken from the debate from all contributions is about access to information and ensuring that it is not unreasonably withheld. It is tricky to get the balance right, making sure that time is not wasted and that information that is genuinely commercial or commercially sensitive in some other regard is protected. However, I have heard that message loud and clear and it is a fair point, so I will go away and think about it in more depth.

Of course, such conversations with the sector are already happening and if there is a path to do something different, we will consider it. I would be loth to commit to something now, but I can commit to examining the issue properly and seriously, given the weight and force of the arguments made.

It was reassuring to see that the Committee’s report acknowledges that scrutiny is working effectively in many councils. We should recognise that. Of course, we should accept that in some places it does not work as well as might be expected, but it does have a key role to play in ensuring local accountability and the effective delivery of services so it is important that councils know how to do it properly. I have committed to working with the sector to update the guidance, ensuring that it meets the needs of councillors and their officers, and I am happy to give further consideration to some of the topics I touched on earlier.

I thank hon. Members who have contributed to the debate. I am grateful to have had the opportunity to discuss this important topic. We are talking about scrutiny and, as was raised in Members’ comments, Select Committees, and in particular the Housing, Communities and Local Government Committee, which I am privileged to appear before, are a great example of how scrutiny can work in practice. It works best in this place—as it should in local authorities—when done on a collegiate basis, with people putting the interests of the public whom they serve first and working as a constructive friend of the people who are trying to make decisions. This Committee is a fantastic example for local authorities and the local government sector to look at. It is a pleasure to work with it, not just on this issue, but hopefully on other issues in the months to come.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Bob Blackman Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 15th May 2018 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

I shall make just four brief points.

Along with the hon. Member for Sheffield South East (Mr Betts), the Chair of the Housing, Communities and Local Government Committee, I examined the Bill in draft. However, the staircase tax was drawn to my attention by my constituent Anthony Broza, who was faced with a swingeing rates demand for more than £8,500, to be paid in one go, which he had no way of paying. I hope that, as the Bill proceeds, the Government will find a way to return the money that has been taken from small businesses as swiftly as possible, because this has had a direct, demonstrable impact on the cash flow of 30,000 businesses across the United Kingdom.

May I issue a gentle reminder to the Minister? Our Select Committee wanted to subject the draft Bill to pre-legislative scrutiny, but because the Government published it long before we were allowed to do that, we were unable to contribute as effectively as we would have liked. I strongly suggest that in future, if the Government wish Select Committees to undertake pre-legislative scrutiny, they should allow them to do that work in advance.

As was mentioned by the hon. Member for Oldham West and Royton (Jim McMahon), local authorities will lose money as a direct result of this—necessary—correction of the law. I have yet to see a quantification of that. I have yet to find out how many local authorities will lose, and how much they will lose. However, given the Government’s clear commitment in the Budget to compensate local government for any losses that would result, I think that they owe a debt of honour to those authorities.

My final point, which I hope will be discussed in the other place, relates to the concerns raised by a number of small businesses about the double-jeopardy risk involved in requesting a review. Requesting a review of rateable value may cause it to increase dramatically, and there is a risk that by asking for a review, small businesses could lose out as a result of what is otherwise a very good measure. I ask the Government to consider how we can ensure that they will not have to pay large sums of money as a result of new valuations. However, I—along with, I am sure, all other Members—support the Bill. It is a very well-meaning measure, and I trust that it will become law as quickly as possible.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

Housing and Homes

Bob Blackman Excerpts

Tuesday 15th May 2018 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to follow the hon. Member for Oxford East (Anneliese Dodds), who made a considered contribution to the debate. I thank Members from across the House for their appreciation for my Homelessness Reduction Act 2017, which has as its centre the aim of reducing the number of people becoming homeless in the first place. Prevention is clearly better than cure, but we have to face up to the fact that, although we can attempt to intervene and to prevent people from becoming homeless, we have to build more homes across the piece that are affordable for people to rent and to buy. That means we have to be radical in our thoughts. The Secretary of State set out a range of things that can be done, but we know that some things need to be done straightaway. He rightly mentioned the Housing First pilots, which I strongly support. However, there are only three pilots, in three parts of the country, whereas this is a nationwide problem. So when my hon. Friend the Minister for Housing answers this debate, I look forward to hearing him say how quickly we will roll out the lessons from the pilots right across the country, so that rough sleepers in other parts of the country can gain the benefit of Housing First, because that is key.

One challenge we face is the unaffordability of housing. One point I lobbied strongly for in the last Budget, and which, I am pleased to say, the Chancellor acceded to, was funding for a national rental deposit scheme and help-to-rent projects. We are yet to hear from the Department as to the various different options that will be rolled out on that. Helping people to rent and providing the deposit would enable 30,000 families to secure their own home, because the one thing they cannot do is raise the deposit to start paying the rent and have a home of their own. We need to be in a position whereby we encourage that process.

Across the piece we are paying out £1.7 billion a year to fund temporary accommodation in this country, and people are in temporary accommodation literally for years—that cannot be acceptable.

We see the price of housing to buy escalating and rents escalating, too. We have to be radical in our thought processes as to how we deal with that. One of the biggest issues is the price of land in the first place. The cheapest land is agricultural land. Speculators move in and get options on that land. When planning permission is granted for alternative uses, the price of that land suddenly escalates. Those people then sell the land on and make money on those options. That cannot be acceptable. We see other challenges in retail or commercial land being transferred to the housing usage class, and there suddenly being a dramatic increase in the land value.

We have to take the land value out of the price of housing in the first place, to reduce the cost of people owning their own homes or, indeed, renting a home. At the same time, we force local authorities to sell their land to the highest bidder, and when they do so, the price of the housing built on that land comes back in the form of a huge housing benefit bill when people rent that housing. We have to close the gap and take the value of the land out of the equation completely.

Older people are now going to be renting well into their retirement—

[Mr Bacon]

Given that housing benefit, which my hon. Friend just mentioned, takes up 3% of public expenditure and costs some £26 billion every year—it has cost £363 billion, more than a third of trillion, in the past 20 years—would he like to see more of that money going into the creation of new dwellings for ordinary people at prices they can afford, rather than enriching more private landlords?

[Bob Blackman]

Yes; my hon. Friend anticipates where I was going. We should tell local authorities, and all other public sector bodies, to gain planning permission for homes to be built on their properties. Instead of paying out huge amounts of housing benefit, we should compensate the public bodies directly from the Treasury for the value of that land, which can then be used for public services. We should then ensure that the rents and prices in the properties built are commensurate with the cost of building those properties, over an extended period of time. Once people have been tenants for 10 years, we should give them the right to buy those properties at the price they were 10 years prior, and then reinvest that money into further new housing. I am a great supporter of the right to buy, but one challenge that we face with it is that we need to invest its proceeds in building new housing.

Those are some of the radical solutions; I cannot do them justice in four minutes, but I hope that we can get some answers from my hon. Friend the Minister for Housing. Finally, may I draw the House’s attention to my entry in the Register of Members’ Financial Interests?

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Bob Blackman Excerpts

2nd reading: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 23rd April 2018 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to follow the hon. Member for Oldham West and Royton (Jim McMahon). I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a vice-president of the Local Government Association.

As I said last week, it is a pleasure to see the Chair of the Select Committee on Housing, Communities and Local Government, the hon. Member for Sheffield South East (Mr Betts), back in his place for this debate. During his absence, the Committee has had to deal with many of the issues we are discussing tonight. I thank my hon. Friends on the Front Bench for coming before the Committee to update us on the Government’s proposals and to give us a chance to comment before the Bill came before the House.

In many ways, that is something from which all Departments could learn. Using Select Committees to do pre-legislative scrutiny is a good way of making sure we get legislation as close to correct as possible before it is presented to the House, rather than requiring the House to develop it further. My Homelessness Reduction Act 2017 went through the same process, so it is clear that the Ministry of Housing, Communities and Local Government is leading the way in government, and we should congratulate it on doing so. However, I will outline some criticisms of the proposals, because there are some concerns.

The staircase tax came as a bolt out of the blue to some 30,000 small businesses in this country. We cannot criticise Supreme Court rulings, but this one was a massive shock to small businesses across the country that have paid their business rates for many years—there was a settled position. The Supreme Court ruling ended that, and I will pay particular attention to what has happened across the country in the past couple of years as a direct result.

My constituent Anthony Broza is the chief executive of Wienerworld, the UK’s leading independent music publisher and distributor. Given that his company is competing against Amazon and other such companies, the staircase tax has a direct impact on his business. He is my constituent—he lives in my constituency—but he runs his business out of an office just across the border in the London Borough of Brent, and therefore the levying authority is Brent Council.

Mr Broza owns an office block that I think is on four floors. He uses the ground floor for distribution and to allow the public to come to see his goods and services, and he uses the fourth floor for administration purposes. He quickly realised that he would not need the other floors so, rather than keeping them empty, he not unreasonably rented them out to other businesses. The floors are connected by a common staircase, hence the staircase tax.

Mr Broza runs a small business and, because he was getting small business rates relief, his rates were effectively zero. Suddenly, after returning from a good holiday, he received a 22-page document from the Valuation Office Agency and no less than nine rates bills from the London Borough of Brent demanding payment within five months. As might be imagined, it came as a bit of a shock to put it mildly. The sole reason for the shock is that the offices are split over different levels, and they have been that way for many years.

[Michelle Donelan (Chippenham) (Con)]

Does my hon. Friend agree that such shocks can deter the very entrepreneurial spirit we need to ensure that the small business economy thrives under this Government?

[Bob Blackman]

Mr Broza’s view is that he might have to close his business as a direct result of this completely unreasonable demand and, as I have said, his is one of 30,000 businesses in that position.

Obviously, the various different charges levied on Mr Broza covered a number of years going back to 2015-16 and 2016-17. The 2017-18 rates bill was even more aggressive, because it took account of an increase in rateable value and the loss of transitional relief and business rates relief. He was placed in a position in which he was suddenly presented with a bill for £8,344.59 in one go, to be paid within the year, when he had previously been paying the princely rates of about £370 a month on one property and only £50 a month on the other. He was clearly encountering a draconian position.

When Mr Broza came to see me, I was shocked that he was being placed in that dreadful position. Clearly, overall, the Government were going to gain from this Supreme Court decision. Whether it is local government or national Government, overall the taxpayer was going to gain some £3,040.95 in one hit that was completely unbudgeted for.

Worse still for Mr Broza, he had budgeted that his business rates bill for the 2017-18 tax year would be zero. Of course, he was then told that he would have to pay £5,365.07 within five months of receiving the bill. I took up this case with the Chancellor, and I am pleased to say that the Chancellor saw the right way to proceed: small businesses in such a situation that have acted in a perfectly reasonable and lawful way should not be penalised by suddenly being hit with a dreadful windfall tax.

However, we have a number of problems still to resolve. I welcome the Bill, under which businesses such as Wienerworld will be returned to their previous position. However, the current position is that the London Borough of Brent, and other councils across the country, are still levying these punitive tax rates and demanding payment. So businesses are having either to find money out of their revenue to pay local authorities—to keep paying the business rates as they are—or to borrow the money in the hope and expectation that it will be returned to them. Either way, this seems unsatisfactory, given that the Government have made it clear they are going to correct the position for those businesses.

[Simon Hoare (North Dorset) (Con)]

My hon. Friend is making a powerful case on behalf of his constituent. Does he agree that quite a lot of these things illuminate the disconnect between decision making and policy making, and an understanding of how the business world, particularly the small, local business world, works? If there was better knowledge and understanding of that, some of these cases, to which he has rightly been drawing the House’s attention, would not arise.

[Bob Blackman]

I thank my hon. Friend for that intervention. Clearly, Government policy should always be driven in an evidence-based way and be sympathetic, particularly to small businesses, which are the lifeblood of our economy. However, we are dealing with a Supreme Court ruling here, as opposed to Government policy. I am pleased that the Government are trying to put it right, which is how this should work. The advice being given by officials from the Department is less than helpful in its current guise, because the correspondence we have had from the Department says that it cannot do anything until the law is corrected. That means that businesses are still being charged these business rates while the law is being changed. One thing the Government need to look at is finding a way of ensuring that people are not having to pay huge sums only for the valuations to be redone and for them to claim the money back, together with interest—there is also the bureaucracy to consider. Businesses just want to get on with their business, rather than sorting out the mess that has been created with their business rates.

The attitude of the London Borough of Brent to Wienerworld—I suspect this is shared by all local authorities across this country—is, “This is the decision. You are due to pay this money. You must pay it or else we will distrain against you to get that money off you.” That means small businesses in this country will go under as a result, and that is the concern. Obviously, the Government are moving as fast as they can to correct this position, but guidance needs to be given by the Department to local authorities on businesses that are suffering financial hardship as a direct result of a decision that was nothing to do with them, is not Government policy and needs to be corrected.

This is a problem in many parts of London, and it has been drawn to my attention that one area that will suffer heavily is Tower Hamlets, which has a number of businesses in respect of which the staircase tax is operational. This is one area where I have criticisms on this issue. Once the Bill becomes an Act and the law is corrected, the businesses will apply for revaluation. As I understand it, their revaluation will go back to 2010 if they so wish—it will probably go back at least to 2015. They will then get a revised bill, and probably a return of money and of interest, which is going to come from the local authority. I noted the Minister’s comment in reply to the Chair of the Select Committee that the position would be that local authorities have experienced a windfall. They have, but many local authorities are now going to have to repay that money once the law is changed back again and they have used that money. It is not money that they were not expecting, because they have had a judgment, and they have used this money in their budget. If the Government now say, “You’ve got to repay the money but we are not going to compensate you for that repayment”, that is a windfall to the Government—

[James Duddridge (Rochford and Southend East) (Con)]

I apologise for not being here for the whole debate, Madam Deputy Speaker—I have been chairing a Bill Committee. What my hon. Friend is saying is worrying me, because a problem of this nature may arise in Southend and we are running a fine budget. Has he quantified, by area, how much money is involved? Finances are already troublesome in terms of local councils trying to deliver the best services locally.

[Bob Blackman]

All local authorities across the country which have had to issue these revised bills over a three-year period on business rates will be looking right now at what the bottom line is for them. The worrying factor about the way the Bill is being introduced is that the repayment is not automatic; each business that may have been affected will have to apply for revaluation. They will then be revalued and finally a bill will be decided, for potentially a three-year period, together with interest. Some businesses may not gain anything, but some will gain a substantial amount of money, with interest, and the local authorities will have to repay that. The current position, as I understand it—we need to press our Front Benchers on this issue—is that local authorities repaying that money would not have had this money if this judgment had not been made. However, they have applied that money to their budgets and they will have to find the money from within their budgets as one-off, windfall damage to their bottom line. That is unfair on the local authorities concerned. They have not taken the decision—this was not a decision any local authority took—so they should not be financially penalised as a result of this. I hope we can move to a position whereby the Department will agree to compensate all local authorities that are out of pocket as a direct result of these decisions, once we have got to a conclusion.

[Mr Betts]

I thank the hon. Gentleman for the work he did in scrutinising this legislation in my absence, and I agree with the point he is making now. Would it not be a lot more convincing from the Government when they say they are not going to compensate because the likely effect is small overall if they were to release to us their detailed calculations, which presumably they have done, about the impact on individual authorities?

[Bob Blackman]

I thank the Chair of the Select Committee for raising that issue. We are talking about 30,000 businesses, many of which will be concentrated in particular areas. We know that there will be a hit for some local authorities, which could be considerable. Hon. Members from across the House will not necessarily be aware of the potential hit for local authorities as a result.

[Simon Hoare]

My hon. Friend will know—if he does not, I will tell him—that I spent seven years doing the finance portfolio on a district council. When a local authority suffers from a flood, there is a Department-run fund they can make a bid to in order to cover the costs they have incurred due to those exceptional circumstances. Might that be an avenue for those local authorities? Might they be able to make such a bid in order to fill this black hole created in their local finances, which was not of their fault and which was unable to be predicted in their budgeting process?

[Bob Blackman]

Clearly, the Government and the Department have figures they can use to evaluate which local authorities are most affected in this way. It may well be that a threshold should be imposed, whereby if only a relatively small amount of money is involved a local authority could not claim it back. However, if a substantial sum is involved, as could happen in many of these cases, we should get to a position where the local authority is returned to where it should have been in terms of the expectation in its budget. My hon. Friend may know that I was in charge of the London Borough of Brent’s finances for many years, so I know the way the finances of that local authority work extremely well. The reality is that this will create a hole in Brent council’s budget, and I do not see why Brent should suffer as a result.

Let me turn to the empty homes premium. My hon. Friend the Member for North Swindon (Justin Tomlinson) asked in an intervention how we can ensure that local authorities can encourage empty homes to come back into operation, but without unfairly penalising those homeowners who are refurbishing their homes or converting them for other purposes, thereby making them temporarily empty for an extended period. We do not want those people to suffer any damage or be charged any financial premiums, but at the same time we do not want unscrupulous homeowners or landlords to keep a property empty, only to do some work when the local authority investigates, just to demonstrate that they are doing something, but still keeping the property empty for longer.

[Michelle Donelan]

Does my hon. Friend agree that that is why the two-year period is a fair benchmark and why the 2013 guidelines on assessing why a home is empty are important in protecting people?

[Bob Blackman]

Clearly, different local authorities have interpreted the rules in different ways. One of the concerns is that owners should not be penalised for refurbishing properties and bringing them back into use, but it must be genuine refurbishment, rather than people artificially refurbishing properties and keeping them empty. That is a very difficult test, and it must be left to local discretion, rather than trying to formulate a detailed law that will not necessarily provide the answer, but will allow learned lawyers to gain from trying to interpret it.

[James Duddridge]

rose—

[Bob Blackman]

I see my hon. Friend twitching.

[James Duddridge]

My hon. Friend anticipates me, because at one stage he said there was perhaps no requirement to change the law, and I was about to leap to my feet. The reason I hesitated was that I was going to support him in any amendment he might table to look at not only existing residential property during that period, but shops above flats. In Southend High Street there are many properties that many years ago—more than two years ago—used to be residential properties, and it is not in the interests of the freeholders or lease- holders on the ground floor to open up those spaces. In Southend that is blocking 800 to 1,000 units, yet it was always the intention of the Victorian architects that they should be occupied. If my hon. Friend tables any amendments, I would be more than happy to add my name if they extend the Bill to cover those important points.

[Bob Blackman]

I hesitate to get into a battle about tabling amendments to the Bill, because we want the Government to reflect on tonight’s debate. We want incentives to bring forward housing and ensure that it is not kept unoccupied unnecessarily for an unreasonable length of time. Flats above shops are an example of the many properties that we can bring back into use. Many are disused or used for storage. Often, they were intended for the owner of the shop to have a residence and to run his or her retail outlet down below, but they moved away from that type of operation many years ago.

[Eddie Hughes]

Has my hon. Friend seen examples, as I have in my constituency, of accommodation above shops being left empty for a considerable period, thereby lowering the tone of the area and leading to antisocial behaviour and an unfortunate downward spiral in the general feeling of the community?

[Bob Blackman]

Clearly, we want our town centres and shopping areas to be revitalised through people living in them and going to them. If people live in the flats above shops, that brings life to the area 24 hours a day, rather than for maybe 12 hours a day, and that must be to our advantage.

[Neil O’Brien (Harborough) (Con)]

Further to the point made by our hon. Friend the Member for Walsall North (Eddie Hughes) about empty shops, I am aware of a house in Huddersfield, where I grew up, that was empty for literally decades on end. It was not just a waste of space and precious land; it was a huge eyesore that dragged down property prices all around. It was deeply ugly and people wanted shot of it. Does my hon. Friend agree that bringing those kinds of properties back into use is the first place we should go to, rather than necessarily building on greenfield sites?

[Bob Blackman]

I am sure that colleagues across the House could come up with example after example of empty homes that could have been brought back into use many years ago. Some should possibly have been demolished and replaced—I have those in my constituency —but the sad reality is that we still have far too many empty homes that should be brought back into use. Those that are derelict and have not been used for literally decades are the first that we should penalise and look to bring back into operation.

Let me end by asking Ministers to look sympathetically at how we can compensate local authorities for the loss of revenue—we have suggested a means by which that could be done—how we can get guidance to local authorities so that they do not penalise small businesses because we are correcting the law in the interim, and how we can get to a position whereby some sensible decisions can be taken as quickly as possible and small businesses that face difficulties meeting their finances are given help and advice, rather than being closed down by banks and other operations that may wish to penalise them in that way. If we can do those things, this will be a good Bill.

[Simon Hoare]

My hon. Friend is being characteristically generous with his time. Does he agree that as all of us, as parliamentarians across the House, work with our local authorities to seek imaginative ways to address the shortage of housing, we need to be absolutely certain that those buildings that could readily be converted from retail to residential use, or in which the residential element could be extended, are not saddled with debts, burdens, judgments or whatever, which could preclude the successful delivery of that opportunity to increase the housing stock in sustainable locations in our town and city centres?

[Bob Blackman]

My hon. Friend draws the House’s attention to another unintended consequence of the decision to implement the staircase tax, which could preclude people who may wish to bring a retail unit into operation as a housing unit, which is something we should all welcome. That demonstrates that we have an opportunity across the House for improvement in both these areas.

Finally, I hope that we can look sympathetically at introducing the empty homes premium in a way that does not penalise those who are improving properties, but does penalise those who are deliberately keeping them empty for no good reason, so that we bring homes back into use and they are used properly, as we would all like.

--- Later in debate ---

[Michelle Donelan]

I am a fan of localism and such decision making could be done on a local level, but I am not sure that I would be as radical as my hon. Friend. I think that the answer lies in increasing the premium rate to a point that makes it unaffordable not to sell the property or to rent it out. I would be interested to hear whether the Government will be commissioning any reviews or studies of the implementation of the measure and looking at potentially raising it further in the future, and whether this is the first step.

[Bob Blackman]

Does my hon. Friend agree that one of the issues is the starting point at which any multiples would apply? Obviously, property prices in London would start at £1 million-plus, so multiples of that sum, as premiums, would be extremely penal and would therefore lead to people thinking twice about leaving a property unoccupied.

[Michelle Donelan]

I completely agree. That is exactly what we need people to do: we need them to think twice about whether it is a sensible decision for their pocket, and then the issue can be resolved for our country.

--- Later in debate ---

[Rishi Sunak]

My hon. Friend makes an excellent point: that should be the long-term test of this policy. It is there to provide an incentive for individuals to bring those homes back into use and indeed, that is what we have seen. Empty properties overall have fallen in the last few years from 300,000 to 200,000, but in areas that are specifically subject to this levy, we have seen a 9% reduction in long-term empty homes since the measure was introduced. Hopefully, we will keep seeing that rate of reduction increase to eliminate as many empty homes as possible. My hon. Friend also raised the topic of foreign ownership. I am pleased to tell him that the Minister for Housing heard what he said and is aware of the issues. In his new portfolio, he is looking into that matter.

My hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who is not in his place, touched on the importance of open spaces. Indeed, the new national planning framework particularly encourages increasing density where possible so that we can do exactly that and preserve our wonderful open spaces. My hon. Friend the Member for Harborough (Neil O’Brien) made so many excellent and insightful points that I do not have time to review them all, but I join him in paying tribute to the campaign groups that have brought the Bill about.

[Bob Blackman]

My hon. Friend is giving good answers to many of the questions, but there is one outstanding question on the staircase tax. Because individual businesses are going to have to apply for a revaluation, there is a risk that they may end up paying more money if they make an application for revaluation and the rateable value increases. Will he look sympathetically at a view that people should not suffer as a result of applying for the revaluation? Otherwise, businesses may choose to say, “This will be too dangerous and risky to our cash flow.”

[Rishi Sunak]

My hon. Friend makes a very good point. I am pleased to tell him that when businesses that have their valuation changed on the historical 2010 list come to appeal that decision, they will have the choice of seeing whether to take that appeal forward, once the Valuation Office Agency engages with them. If, for whatever reason, it decided that there were some other measure that it needed to change that caused an increase in the valuation, they could then choose not to pursue that matter, so they would not suffer from any increased rating. Of course, the current rating list is dynamic, as he will know. Changes good and bad will be relevant for the life of that list, as is the normal course of business.

Lastly, the hon. Member for Oldham West and Royton raised the issue of the Government’s broader support for business rates and for business across this country. He will know that the Government stand on the side of small business. The combination of measures announced in the last Budget and subsequently to the tune of £10 billion to help businesses up and down the country facing the revaluation included bringing forward the indexation to CPI; extending the £1,000 pubs discount, which I know many hon. Members across the House welcomed; doubling small business rate relief; and providing a £300 million discretionary fund for local authorities to apply in cases where there was particularly difficulty.

In conclusion, this important Bill will deliver widely supported measures to tackle an unfair and unintended rates increase for certain businesses and support the Government’s efforts to bring empty homes back into use. I appreciate all the comments from hon. Members this evening—no doubt we will return to some of them in Committee—but I am glad that we can all agree that the overall aims of the Bill and the positive impact that it will have for businesses and families seeking to call a place home should be welcomed. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 3 May 2018.

(3) The Public Bill Committee shall have leave to sit twice on the first day in which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on Consideration.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on Consideration.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Kelly Tolhurst.)

Question agreed to.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52 (1)(a)),

That, for the purposes of any Act resulting from the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill, it is expedient to authorise:

(1) the payment of sums to the Secretary of State in respect of non-domestic rating, and

(2) the payment of those sums into the Consolidated Fund.—(Kelly Tolhurst.)

Question agreed to.